Thursday, May 10, 2012

For Nothing Left to Lose

Nothing don't mean nothing honey if it ain't free. There's been some interesting commentary already on Esther Duflo's Tanner Lecture. All I have to go by is commentary, as I wasn't in attendance nor have I read a transcript, so if I make any factual errors here, I do hope you won't hold me in too much contempt.

According to the linked article, the crux of Duflo's argument is that paternalism is justified as part of a campaign towards greater liberty. People can't self-actualize (I do not know if she referenced Maslow or not, that reference is mine) if they're too busy dealing with dysentery or polio. Clean drinking water and vaccines are prerequisite to having the freedom to conduct business, raise your kids, fly a kite or what-have-you. Because of this, some forms of paternalism are entirely justifiable, perhaps even on libertarian grounds.

What it seems we've got here is BATNA disparity, and on a big scale. It's not euvoluntary for desperately poor people to have to decide to treat their own water because:
a) the opportunity cost for the individual is so high and
b) the opportunity cost for the state is so low
Likewise vaccines, likewise... well, like I said, I'd have to listen to the lecture to comment much further.

I think my question is whether or not these same arguments apply where the BATNA disparity is much lower. what if I get off the city water feed, tap a well in my backyard and hook up my own filtration system? The paternalist would say: "nope, you can't be trusted to change your filters annually so you have to stay on the city's cistern." Something tells me Duflo would find this kind of statement offensive.

As far as useful interventions go, maybe it's the case that some paternalism would increase the set of available euvoluntary transactions among the world's poor, but wouldn't it be great if the world's poor had access to good property rights, liquid credit markets and the rule of law so their BATNA wasn't so awful? It sometimes puzzles me why growth economists don't lecture more frequently on the benefits of liberalized immigration reform.